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01 Types of Business ownership


by person. Typically

Proprietorship: a business owned and managed by the . Advantages: a. to start-up (form.)

b. Owner/manager has c. d. One time Disadvantages: a. Limited b. Unlimited c. Limited to lifetime of 2. have entered into a depends on the Advantages: a. More b. Combined resources ( c. Shared d. Shared e. Work easier to and A business owned and receives all means limited taxes (money) (responsible for

of business.


(business formation dies with owner) by or more people who ; management of the company .

available than a sole , responsibilities )

than a sole proprietorship

Disadvantages: a. Shared b. Responsible for each others c. Potential for d. Unlimited e. Limited to lifetime of the partnership 3. Limited Liability Partnership: identifies some the of their participate in the day-to-day 4. Corporations a. An organization by a board of

among partners (depending on type.)

who cannot lose more than are not allowed to

by one or more .


b. Ownership i. Determined by ii. A stockholder ( iii. Advantages: c. Easier to obtain d. Limited e. Life of the corporation is Disadvantages: a. Double (profits and earnings) b. Increased regulations and legal restrictions c. Decision-making shared among , and . 5. Cooperatives a. Owned by b. Purchase c. Greater 6. Franchise a. Permission to for ( ) ) owns a piece of the company

Share of common stock equals one


, serves their needs and is managed in their interest. cheaper as a group than as individuals power than as individuals

a business to sell products and services in a

. b. Begins with a company who the product or service and grants the to another business c. Franchiser: the company that the product d. Franchisee: the company the right to run the business 7. 8. Types of Franchises a. Business format: requires b. Product trade name: allows usually formed by product.

to sell products or service in a to sell specific products. This format is and

What type of Business Ownership types should your friends and family have? Why? 1. Tom, Sally, and Joan created a new video game that is selling over a thousand units per day! ___________________________________________________________________________

2. Bob wants to start a lawn service. ____________________________________________ 3. Cousin Walter wants to open a hotel and have people invest in it. __________________________________________________________________________ 4. Aunt Vivian wants to open her own Subway shop. __________________________________________________________________________ 5. Your neighbors want to start a farmers market so everyone can have fresh vegetables and make a little cash. ______________________________________________________________________________

9. Types of Partnerships a. b. c. d. e. public. plays no role and is not known to the public. Plays an (every partnership must have at least Participate as role and has unlimited and have limited liability plays an active role but is does not have an from society. role but is known to the

Types of Partnerships
Type of Partner Participation in Business Relationship to the Public Degree of Liability

What type of Partnership should Tom, Sally and Joan have? Why? 1. Tom loves running the marketing part of the business and wants to run the day to day operations.
______________________________________________________________________________________________ ___

2. Sally feels her strength is creating games and does not want to be bugged by fans. _________________________________________________________________________

3. Joan is willing to give money so the company can expand and they can make more money but doesn t want to be liable for too much. _________________________________________________________________________ 10. Specialized Corporations a. Subchapter S (S-corporation): treats

as individuals by taxing them

b. Limited Liability Company (LLC) provides liability for owners c. Nonprofit corporation: a of people who join to do some activity that . d. Domestic: in a specific state Examples located in NC: Bank of America, Lowes Home Improvement e. Foreign: chartered in one but doing business in another state f. Alien: chartered in another but doing business in a state g. Public: established for a purpose Examples: National Science Foundation, Export-Import Bank of the US h. Private: established by individuals for or purposes Examples: Enterprise Rent-A-Car, American Cancer Society Cousin Walter should have what type of corporation? ___________________________